Posted by Don Fullerton on Feb 11, 2011

The very existence of the Environmental Protection Agency (EPA) has long been a point of contention between the two political parties. What is, and what ought to be the role of the EPA with regard to policy making? Congress cannot possibly enact laws that contain every detail about subsequent implementation, monitoring, and enforcement. And they should not put everything in the law anyway, in order to allow enough flexibility to deal with future contingencies. Besides, those in Congress don’t have the science background necessary to decide all of the details of some technological aspects of pollution prevention.

The law does not say that every electric power plant must reduce emissions of each pollutant to no more than some number, like 37 micrograms per cubic meter. Instead, the law from Congress just says that EPA should protect human health to an adequate margin of safety.

Yet some would prefer that the EPA disappear, along with every agency having any regulatory power. This agency, which was conceived in 1970 under Richard Nixon, has analyzed and supported some of the most important pieces of legislation of the last forty years, ranging from the Endangered Species Act to – more recently – the new emissions standards going into effect this year.

In 2007, the United States Supreme Court ruled in a 5-4 decision called “Massachusetts vs. EPA”, that the EPA could in fact regulate greenhouse gases under the Clean Air Act, on the grounds that such emissions do affect human health. When combined with the new Republican-dominated Congress, we have set the stage for yet another ideological battle.

Throughout the past decade, much of the discussion about controlling carbon dioxide emissions has largely centered around the idea of Cap and Trade. That system would effectively put a price on each unit of pollution emissions. It would create a market where the need for emissions and the cost of emissions are balanced in a way that can achieve economic efficiency. However, the most viable attempt at this in recent years, the Waxman-Markey bill of 2009 (H.R.5454), passed the House and not the Senate. It would not even get past the House in this term.

The question then becomes, what exactly are the cards that the EPA retains in their deck?

A recent article is titled “Greenhouse Gas Regulation Under the Clean Air Act” by researchers at Resources for the Future (RFF, by Burtraw, Fraas, and Richardson). It seeks to explore the options available to the EPA, in-depth. What they find is that the EPA can implement measures that will reduce greenhouse gas emissions significantly in a measured and cost-effective manner. For this to happen, however, they argue that the EPA must become bold and decisive in their actions.

Bold action may be taken as an example of government overreach, and so the EPA must be careful.

Republicans are currently in discussion to introduce the Energy Tax Prevention Act of 2011 . They recognize that the EPA holds some powerful cards after the Supreme Court ruling in 2007, and they want to take that power away. This Act would shift the EPA’s ability to regulate from the Agency to the legislative branch. Yet such an action could take any decision-making ability from the scientists and put it in the hands of the politicians. As EPA leader Lisa Jackson said, “Politicians overruling scientists on a scientific question – that would become part of this committee’s legacy.’” Herein lies a problem with democracy. The people in charge of making the decisions that affect us all, often have little knowledge of the actual issues at hand. After all, Republicans from oil-rich states like Oklahoma still claim global warming is nothing but a hoax.

Congress has attempted to intervene in regulatory matters when proposed regulations went against the interests of a substantial number of their constituents. For example, it stopped the FDA from prohibiting the use of saccharin on the basis of some questionable cancer tests from Canada. There is no reason to have priors that indicate that regulatory agencies are better at making these decisions than the Congress. In fact, there is quite a large literature that suggests that regulatory decisions often benefit those being regulated as opposed to consumers. For example, there is quite a bit of evidence that the introduction of ethanol as a gasoline substitute largely benefited the corn lobby with little benefit in terms of overall efficiency of producing energy or in terms of the carbon footprint.